Because of the coronavirus pandemic, several agribusinesses are in great difficulty. Although they’re in essential industries, some businesses had no choice but to limit operations or close completely.
In these times of crisis, farms and ranches are prone to be tricked by phishers and scammers. It goes without saying that information should never be given to a questionable third party. However, the promise of quick solutions during a pandemic makes farm and ranch owners prone to let their guard down and make mistakes.
One of the most common scams a small business could encounter during this time is business identity theft. Learning how to spot the signs and protecting your business could save you money and give you peace of mind.
What Is Business Identity Theft?
Just as identity theft involves someone pretending to be you, business identity theft involves someone pretending to be your business. It could be connected to the theft of business customer data or a security breach in your database.
The National Cybersecurity Society (NCSS) lists the following ways a thief could pose as your business:
- Financial Fraud: Obtaining new lines of credit or filing fraudulent UCC statements under your business’ name
- Tax Fraud: Using tax subsidies and obtaining refunds by filing fraudulent returns
- Website Defacement: Manipulating your business website
- Trademark Ransom: Registering the business’ logo or name as an official trademark then demanding an amount for the release of the trademark
What Happens to Your Business During an Identity Theft?
Business identity theft can turn your agribusiness dreams into a nightmare. It could negatively affect your business and personal credit report, making it difficult for you to take out agricultural loans or other credit lines.
Scammers could steal money from your business account, making your farm or ranch unable to pay employees, bills, and tax requirements. Fraudulent transactions could generate negative tax consequences with the IRS.
Disputing and unraveling fraudulent transactions is also a lengthy and expensive process that might force your business to close.
Protecting Your Business Identity
Proactively protecting your business from identity thieves is essential to preventing identity theft from happening. Here’s how you can address this potential risk:
1. Protect your data
The NCSS advises using a strong password for all your business accounts. The password should be at least 16 characters long and should be changed often.
Sign up for two-factor authentication to receive alerts every time you or someone logs into business accounts. Regularly check all your financials and credit reports and notify agencies of any errors you find.
If you have a business website, make sure that it has the necessary layers of protection.
2. Verify your transactions
Set up additional layers of approval, like a one-time pin, before any payments go in and out of your business account. Check the purchase order numbers of your invoices and make sure they match the transactions in your records. Verify the legitimacy of the addresses where you’re sending the payment and call the people you’re transacting with if you have any questions.
3. Educate your employees
Help your employees understand business identity theft and its consequences. Train them on how to recognize warning signs and avoid mistakes that can open the door to thieves.
For example, they should not disclose business information to callers or on social media. They should also know how to avoid phishing scams, which trick them into giving away account information.
The last thing you want to happen to your business is to fall victim to identity theft during the pandemic. By proactively taking these steps, you can ensure that your business information is safe. That way, you can focus on keeping your business running during these trying times.